People need hefty amounts of money to construct or buy a finished home. In most situations, they hardly have the required sum of money in their hand. Therefore, they opt for a home loan that helps them realise their dream of owning a home. However, the complex calculations of home loan rate of interest for a fixed tenure add to the confusion of loan borrowers. To solve this problem, financial institutions provide the option of an automated tool to calculate home loan EMI.
Home Loan EMI Calculator
An EMI calculator for a home loan provides the amount you need to pay every month for the entire tenure. It is a digital tool that helps borrowers make an intelligent decision for selecting the best loan according to their needs. You can quickly calculate home loan EMI online by entering the details like principal loan amount, home loan rate of interest, and tenure.
Benefits of Calculating Home Loan with EMI Calculator
Calculating the EMI of the home loan before starting the application process is essential because of the following reasons:
- It helps you to decide the basic principal amount for your loan according to your financial budget.
- It provides detailed information on the amount you need to pay every month for the whole tenure. This is helpful for managing your expenses to repay the loan amount on time.
- You can change the tenure in the online EMI calculators to see its effect on the monthly instalments and accordingly choose a tenure for which the monthly instalments are affordable to you.
- It is easily accessible through online platforms. You merely need a laptop or a mobile phone with an internet connection to use the EMI calculator.
- It is an easy and error-free process to calculate home loan EMI. You need to enter the loan amount, tenure, and interest rate of the loan to get the result in seconds.
- It provides a detailed breakup of the amount you need to pay throughout the tenure. Since a home loan is taken for a long duration of time, it might be difficult to keep an account of the financial spending each year. However, the EMI calculator’s report helps the borrower look at the amount they need to pay every year to avoid the chances of default.
- You can easily compare loan offers by entering the home loan details of various banks.
How to Compare Home Loan with EMI calculator?
A home loan EMI calculator is an automatic tool where you can make changes to all the details like amount, rate of interest, and loan repayment duration to determine which loan is suitable for your requirements.
This can be understood with an example. Suppose a bank is offering a loan at a 7.5% home loan rate of interest, you can make changes to the loan amount and tenure to check which EMI is affordable to you. The following table elaborates the comparison of EMI at a fixed interest rate:
|Principal amount||EMI for 10-year||EMI for 20-year||EMI for 30-year|
|1 crore 50 lakhs||1,78,053||1,20,839||1,04,882|
The table shows the effect of changes made to the loan amount and the tenure. Therefore, you must calculate home loan EMI and analyse the results before choosing a loan amount and repayment duration.
Applying for a home loan is the initial step to owning your dream house. However, to ensure your ability to make all the payments on time, you must use an EMI calculator to compare loan amounts and tenure. This process assists in getting your hands on the best loan offer from the banks that do not cause you any distress during EMI payment.